Abstract: Hedgehog (Hh) proteins function as morphogenes and play critical roles in pattern formation and cell growth control. Aberrant Hh signaling causes diverse types of cancers. The G protein-coupled receptor (GPCR) family protein Smoothened (Smo) is required in both insects and mammals for transduction of the Hh signal. This project uses Drosophila as a simple and genetically tractable model system to explore the mechanisms of Smo regulation at the levels of transcription and post-translation. The long-term goal of our research is to elucidate how Hh signals are sensed and transmitted to control downstream biological events that ultimately govern cell growth and patterning. Many components in Hh pathway have been identified, how the Hh signal is transduced through Patched (Ptc) to Smo is still unclear. We have discovered that Smo undergoes phosphorylation that leads to Smo cell surface accumulation and signaling activity, that sumoylation induced by Hh promotes Smo activation, and that ubiquitination downregulates Smo cell surface accumulation by promoting Smo endocytosis. Results from our studies have suggested that, in response to Hh stimulation, multiple steps occur in Smo regulation. However, many questions persist regarding the mechanism controlling Smo protein expression and activation. To address these questions, we have recently discovered that Smo transcription is regulated in specific tissue, and that a non-canonical cholesterol biosynthesis pathway regulates Smo accumulation and activation. Our published findings and preliminary studies provide new tools and hypotheses for investigating the mechanisms of Smo signaling. In this project, our central hypothesis is that reciprocal regulation of lipolysis and Hh signaling allows Smo transcription to be upregulated by a specific transcription factor and Smo protein activity to be triggered by cholesterol. We will use a combination of genetic and biochemical approaches in three Specific Aims: 1) to determine how Hh promotes lipolysis by regulating the expression of lipolysis genes; 2) to delineate the transcriptional regulation of Smo by a novel transcription factor; 3) to investigate how endogenous cholesterol biosynthesis regulates Smo.